Ethics Review Says Hiring Scandal Was Isolated

An independent ethics review of Boeing senior-level hiring practices found no widespread conflicts, but identified several areas for improvement and said Boeing should be more consistent in enforcing existing hiring policies and procedures. The review, led by former Sen. Warren Rudman, was prompted by the November firings of Boeing Chief Financial Officer Michael Sears and missile defense executive Darleen Druyun, who were accused of unethical conduct surrounding Mr. Sears' recruitment of Ms. Druyun while she was a U.S. Air Force employee.
 
Boeing says Mr. Sears and Ms. Druyun discussed job opportunities at Boeing before Ms. Druyun stopped working on Boeing-related Air Force programs, providing grounds for firing them both. Mr. Sears, through his lawyer, has denied any wrongdoing. Ms. Druyun has not commented on the matter. The incident prompted the Pentagon to put on hold a $27.6-billion deal for the Air Force to lease or buy 100 Boeing 767s as refueling tankers, pending the outcome of several criminal investigations and other reviews, possibly in May.

The Justice Department, the Defense Department's inspector general and the Securities and Exchange Commission are all examining the matter, and lawmakers plan hearings on the so-called "revolving door" between government and industry.

"Boeing had a process in place, we just want to make that process better," Mr. Rudman told Reuters.

The Rudman report, commissioned by Boeing and released Tuesday, said Boeing's former job application process did not ask if a candidate had been involved in Boeing-related activities or had filed a disqualification statement covering Boeing. The report concluded that the situation involving Mr. Sears and Ms. Druyun was an isolated case. But Mr. Rudman took issue with Boeing's "sporadic adherence" to its own written hiring policies and procedures. In his findings, Mr. Rudman acknowledged his review was not "an exhaustive audit of Boeing's hundreds of government and former government hires over the past five years," but rather an examination of senior-level hires where the biggest risk of conflict could arise.

"There is no ‘magic bullet’ to ensure that everyone follows the established policies and procedures in hiring government employees, but additional training, safeguards and centralized oversight and control can substantially reduce the risk that mistakes will be made in the hiring process," Mr. Rudman wrote in the report.

The ethics review is the culmination of a three-month investigation into Boeing’s hiring practices. Boeing requested the review to identify weaknesses in its hiring systems, particularly as they relate to government employees.

"You have to have a checklist," agreed Mr. Rudman. "You don't rely on anybody's representations."

Boeing Chairman Lew Platt said the company has already begun to implement some of the report’s recommendations. "We are tightening up central oversight, improving record-keeping, monitoring the records of people as they move through the system, increasing our audits ... and improving training in all of these areas," he said in a statement.

FMI: www.boeing.com